Permian Basin Royalty Trust (NYSE:PBT) vs. Golar LNG (NASDAQ:GLNG) Critical Review

Golar LNG (NASDAQ:GLNG) and Permian Basin Royalty Trust (NYSE:PBT) are both energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.

Profitability

This table compares Golar LNG and Permian Basin Royalty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Golar LNG	31.27%	8.91%	3.75%
Permian Basin Royalty Trust	91.96%	9,990.08%	510.19%

Risk and Volatility

Golar LNG has a beta of 0.05, indicating that its stock price is 95% less volatile than the S&P 500. Comparatively, Permian Basin Royalty Trust has a beta of 0.5, indicating that its stock price is 50% less volatile than the S&P 500.

Institutional & Insider Ownership

92.2% of Golar LNG shares are held by institutional investors. Comparatively, 28.9% of Permian Basin Royalty Trust shares are held by institutional investors. 0.0% of Golar LNG shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and target prices for Golar LNG and Permian Basin Royalty Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Golar LNG	0	2	4	1	2.86
Permian Basin Royalty Trust	0	1	0	0	2.00

Golar LNG presently has a consensus price target of $63.00, suggesting a potential upside of 21.65%. Given Golar LNG’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Golar LNG is more favorable than Permian Basin Royalty Trust.

Earnings & Valuation

This table compares Golar LNG and Permian Basin Royalty Trust”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Golar LNG	$393.52 million	13.33	$65.68 million	$1.60	32.37
Permian Basin Royalty Trust	$16.13 million	101.50	$14.30 million	$0.35	100.36

Golar LNG has higher revenue and earnings than Permian Basin Royalty Trust. Golar LNG is trading at a lower price-to-earnings ratio than Permian Basin Royalty Trust, indicating that it is currently the more affordable of the two stocks.

Dividends

Golar LNG pays an annual dividend of $1.00 per share and has a dividend yield of 1.9%. Permian Basin Royalty Trust pays an annual dividend of $0.22 per share and has a dividend yield of 0.6%. Golar LNG pays out 62.5% of its earnings in the form of a dividend. Permian Basin Royalty Trust pays out 62.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Golar LNG has raised its dividend for 2 consecutive years. Golar LNG is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Golar LNG beats Permian Basin Royalty Trust on 12 of the 18 factors compared between the two stocks.

About Golar LNG

Golar LNG Limited designs, converts, owns, and operates marine infrastructure for the liquefaction of natural gas. The company operates through three segments: FLNG, Corporate and Other, and Shipping. It engages in the regasification, storage, and offloading of liquefied natural gas (LNG); operation of floating liquefaction natural gas (FLNG) vessels or projects; transportation of LNG carriers; and vessel management activities. Golar LNG Limited was founded in 1946 and is headquartered in Hamilton, Bermuda.

About Permian Basin Royalty Trust

Permian Basin Royalty Trust, an express trust, holds royalty interests in various oil and gas properties in the United States. The company holds a 75% net overriding royalty interest in the Waddell Ranch properties, including Dune, Sand Hills (Judkins), Sand Hills (McKnight), Sand Hills (Tubb), University-Waddell (Devonian) and Waddell fields in Crane County, Texas. It also holds a 95% net overriding royalty in the Texas Royalty properties, which consist of various producing oil fields, such as Yates, Wasson, Sand Hills, East Texas, Kelly-Snyder, Panhandle Regular, N. Cowden, Todd, Keystone, Kermit, McElroy, Howard-Glasscock, Seminole, and others located in Texas. Its Texas Royalty properties comprise approximately 125 separate royalty interests containing approximately 51,000 net producing acres. The company was founded in 1980 and is based in Dallas, Texas.